How Countries Might Be Paid for Climate Loss and Damage: NPR


In the Pacific nation of Vanuatu, rising sea levels are threatening coastal communities, a problem the country’s leaders say is caused by the wealthiest nations. They ask for damages.

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In the Pacific nation of Vanuatu, rising sea levels are threatening coastal communities, a problem the country’s leaders say is caused by the wealthiest nations. They ask for damages.

Mario Tama / Getty Images

For small Pacific islands, a powerful cyclone can be devastating. In 2020, Cyclone Harold hit the island nation of Vanuatu, destroying schools and farmland. In one province, 90% of the population has lost their homes.

The $ 600 million in damages represent over 60% of the country’s gross domestic product.

“This is huge sums of our national wealth being wiped out by climatic extremes,” says Christopher Bartlett, who works in climate diplomacy for Vanuatu.

Vanuatu is part of a coalition of low-income countries that asks wealthier nations to pay for climate damage. Developing countries have produced very little of the pollution that drives climate change. Richer nations like the United States have been the largest emitters of greenhouse gases. But developing countries are already bearing the brunt of destructive impacts, such as storms, floods and droughts.

With the world far from its goal of stopping dangerous levels of warming, developing countries argue that richer nations should pay for the inevitable “loss and damage” they will suffer.

So far, the wealthiest countries have delayed the commitment of the funds, although they have agreed to address the issue during the COP27 climate negotiations that are now underway in Egypt. At last year’s summit, nations agreed to engage in a dialogue on loss and damage, a process that developing countries say has failed by far.

The Biden administration has signaled its support for addressing loss and damage. But dollar amounts are still elusive and it is unclear how payments could be delivered.

There is talk of money at COP27 as wealthier countries face their own economic turmoil, including inflation, possible recession and energy upheavals resulting from the Russian war in Ukraine. But without progress on loss and damage, the chances are greatly reduced that the world can stick together on an already difficult path to reduce emissions.

“For some developing country groups, it could be the last straw for them,” says Preety Bhandari, senior climate finance advisor at the World Resources Institute. “It really could be the last straw and they might be ready to go out.”

$ 177 million: Vanuatu’s starting point for climate compensation

For Vanuatu, a South Pacific nation made up of 82 small islands, few people are isolated from climate change. Agriculture there largely depends on rain patterns. Fishing is a vital sector. Many people live near the coast.

The country’s leaders have made it clear that climate change threatens Vanuatu’s very survival. To advance the conversation at COP27, Vanuatu has set a starting point for its loss and damage needs, totaling $ 177 million.

“What is happening now is affecting human lives and human rights,” said Bakoa Kaltongga, Vanuatu’s climate envoy. “We small islands and small island people have every right to exist in the world, just like all of you great northern nations.”


Uwen Garae examines her damaged home in Port Vila, Vanuatu in the aftermath of Cyclone Pam in 2015. The country has been hit by two Category 5 storms in the past 7 years.

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The plan does not include disaster relief from cyclones, which are becoming stronger and more intense as global temperatures rise. An international humanitarian aid system generally comes into operation after a crisis, even if it often fails to sustain a full recovery.

Vanuatu leaders say it is difficult to get help with slower climate impacts, such as rising oceans. On the coast of Vanuatu, water is increasing at a faster rate than the global average. Many coastal communities may need to be relocated – a difficult and challenging process anywhere in the world.

The bulk of Vanuatu’s proposal would go towards creating a loss and damage fund, so that residents can quickly receive compensation. Other funding would go to creating systems to help with relocation efforts and support displaced people.

“It is to ensure that as we relocate populations, we do so in a planned way in advance so that people can move with dignity and not scramble at the last minute without the basic services and protections we deserve,” Bartlett says.

Losses and damages also mean paying for what cannot be replaced

While communities can potentially be rebuilt in new places, some of what is lost cannot be recovered. Important cultural sites can disappear under the rising water. In Vanuatu, cemeteries are at risk, so some funding would also go to community-led discussions on how to best preserve their bond with ancestors.

“I can’t tell you how many times, as you enter the community, you see graves and burial sites that are half exposed to the rising tides,” Bartlett says. “And it’s devastating because it’s such an important link to history and ancestry here in the Pacific.”

The country’s coral reefs are also at risk of collapse. The oceans are getting warmer and more acidic, which can cause coral bleaching, turning ghostly white. After repeated waves of marine heat, corals simply cannot recover.

Losing coral reefs would be fundamentally destabilizing, both as an ecological change and for the many local fishermen who depend on them for their livelihood.


Vanuatu is calling on wealthier nations to pay a loss and damage fund, in part to help with resident relocation efforts as sea levels rise and communities are displaced.

Mario Tama / Getty Images


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Mario Tama / Getty Images


Vanuatu is calling on wealthier nations to pay a loss and damage fund, in part to help with resident relocation efforts as sea levels rise and communities are displaced.

Mario Tama / Getty Images

There remains the debate on how the loss and damage payments would work

Around the world, the toll of losses and damage is expected to increase as the climate gets warmer. A study shows that costs from loss and damage could reach $ 290 billion to $ 580 billion in 2030 and rise to over $ 1 trillion annually in 2050.

At last year’s climate talks in Glasgow, a bloc of developing nations called for the creation of a fund or “tool” to provide funds for loss and damage. But as the negotiations progressed, they settled on a three-year dialogue, which developing countries say lacks a clear decision-making mandate.

At this year’s negotiations in Egypt, the debate on whether to set up a new fund is expected to continue. Some support using existing humanitarian aid networks. Others have suggested that countries should be forgiven for international loans if it is linked to their climate vulnerability. Many countries have already taken on more debt after major disasters, in addition to the international loans they have for the broader development of society.

“Many of these countries are burdened with debt,” says US special envoy for climate John Kerry. “They are strongly affected by what is happening with respect to the crisis, the climate. And then they turn around and the west or the north offers them more debt. It won’t work.”

However, this year’s talks could take on new urgency, following the unprecedented damage to Pakistan caused by extreme floods. Millions of people have been displaced, with damage totaling over $ 30 billion. At least 1500 people were killed.

“The recent floods in Pakistan have clearly shown what losses and damage can look like and what the toll could be,” says Bhandari. “Not only in terms of human lives and economic losses, but also in terms of all the development gains that are being lost in the countries that are really trying to leapfrog the next level of development.”

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